tv Inside Story Al Jazeera September 5, 2014 5:00pm-5:31pm EDT
>> hello, i'm ray suarez. sure one month does not make a trend, and along with that less than eye-popping job number there have been other healthy signs in the wider economy. but wage growth remains sluggish, and that remains a problem for anyone who sells goods and services to customers. the slower job growth means the federal reserve may not be so quick to raise interest rates. on the other hand, on the other hand, you get the idea. it's tough to figure out the overall direction of the economy. the answer to the question how is it going may depend on how old you are, where you live, and what you do to make a living.
>> reporter: august broke the trend. adding 142,000 new jobs last month. it's the smallest increase since 2013. a sign of continued recovery but also unpredictability. here's a break down by sector. 47,000 jobs were added in professional and business services. 34,000 positions were added in healthcare. the leisure and oh hospitality added 22,000 positions. economists attribute this to people giving up on job hunting all together. despite the weaker jobs numbers the overall economy continues to improve. in the second quarter of 2014 the real gross domestic product of the u.s. rose at an you'll rate of 4.2% driven by increase in exports and consumer
spending. the economy is strong but the labor market may be wallo wobbling. it seems the timing of any interest rate increase in the next six months may nobody doubt. >> that underwhelming number of new jobs, 142,000 should you look at it as an isolated blip or something that should concern the economy going forward, especially when taken together with downward revisions of previously announced new job totals for june and july. jobs and the wider economy this time on inside story. we'll begin our look at the economic and political landscape with our own ali velshi, the host of "real money." just a short time ago he interviewed the secretary of labor. we'll have that interview later
today. >> for 50 months you've seen job growth and it's been getting better, and they do what the administration is expected to do. every administration i've ever talked to on jobs day tells us what is fantastic on jobs report. the truth is this isn't as bad as it looks. part of that is really two reasons. there was an anomaly caused by the northeastern grocery chain. in 11 of the last 15 years the report for august gets revised upward because it's not accurate. a lot of people are not around to answer the survey that results in these numbers. that probably also accounts for the same 30,000. so bottom line this report might get revised to 175,000 jobs having been created in august. that still is lower than what we expected by 50,000. it's still not great.
it's not bad. it's just not great. >> does it stand on the shoulder of previous months and actually start to show a change in the picture. if you're an individual heading out there to look for a job things are better than they were, let's say this time last year. it all depends on your industry. we've seen housing prices go pup month by month. we see interest rates low and construction is a fantastic industry. there are so many attendant jobs with each jobs. where we normally see a slow down i in the summer is in the auto industry. but the auto industry has been
really strong. if you're an architect, engineer there are lots of jobs for you. if you're a service employee where you earn between minimum wage and $10 to $11 an hour, it's not a good economy. if you're a food serve or waiter, times are not good. it depends on where you stand on the economic ladder. for half of americans things look better. and for the other half things don't look like they changed all that much. >> where you described things are tough you have no power on your side of the table to demand higher wages. >> none. you can partake in protests from time to time. they don't amount to anything. you can listen to politician who is tell you they would like to bring in a minimum wage and of course that will be a big issue for the midterm elections.
but you can't do what you used to be able to do which is to talk to your union because a small percentage of american workers are unionized. and those who are lack clout and collective bargaining power. they can't do anything. the take away that it's too late for some people if you have a college degree generally speaking the rate of unemployment is half of what it is for the general population. so education has been really the only bull work, but then it doesn't guarantee anything. if you're not college-educated and a service worker in this country, you have to hope that the economy gets better. >> are there multiple workforces now. you can have tightness in the labor market that is discrete and even as unemployment-- >> yes. >> unemployment continues to go down, there may be slack demand in some ways of life and in some
areas of the workforce, and really tight demand that helps you get a higher paycheck in others. >> it's an entirelly by bifurcated workforce. you got other people saying there is no labor shortage, there is no skills gap. we don't have jobs. if you're in the restaurant industry, bar industry, manufacturing industry, it's yours for the picking. you can pay people the lowest wage your state allows them to pay them, it's not great way to do business, but they're not all that worried about keeping people around for that long of time. there is a slack in that type of industry. this is where the slack becomes troubling. here is velshi saying that the
unemployment is down. and they feel entirely disconnected. i'll add something to that rate. if you don't own a house, which has been increasing in value, on the don't own stock which has been increasing in value since the beginning of last year think about that, no good wage job. no house, no stocks, what recovery are we talking about. >> how does this position us for the rest of the year? it doesn't do anything for the midterm election. you feel a certain way about what you're entitled to, i don't think it will become--things like wages and jobs won't become big election issues because everybody knows where they stand. i will tell you the larger concern is how we erode the middle class and as we go to our corners, the wealthy a and the
wage earners who have having a hard time making a go of it, we've regressed into the type of society we decided we are weren't going to be as americans. the reason why people came to america. it's a global rate, but give the economic forum in its recent report on global competitiveness, america is third in the world but one of the biggest problems in america keeping it from being higher up in the ladder is the massive inequality that is growing in this country. it is growing faster in this country than it is in other industrialized countries. >> ali velshi is host of "real money." you can see "real money" 7:00 eastern and 4:00 pacific. thank you for being with us. >> during the break this channel will encourage you to buy products that will keep people employed around the country. then we'll look at the economy
that economy on this edition of the program. for the rest of the way i'm joined by bill snyder, senior distinguished fellow at midway. and mark hamron. along with the percentage of unemployment and the raw number of increases the labor statistics dump a lot of data in the lapse of guys like you. when you saw the report what jumped out at you? what are the metrics we should be looking at. >> the headlines do focus on the payroll gain that was disappointed as you noted following the trend, certainly the six or seven months. but once you look beneath the surface of that, there is really some one-time factors that seem to extract the importance of that. so we can say that for as long as we can remember this recovery has been frustratingly slow, often a two steps forward, one
step back afire. we're reminded of that with this report. still we think this "n" the coming months we should have two, three, three and a half percent growth, just one of the many metrics were watching, and as your peace indicated income gains. we want to have a rising tied that lifts all boats in the united states, something that has not been felt very strongly for many years now. >> michael: just before the job number came out, word that the economy grew at over 4%. now that's an ey an enormous economy. that is a mature number in the economy. how come it's not create morgue jobs? >> we've had a lot of bouncing around in that gdp number in a contraction of 3% in the first quarter. and that contraction in the earlier part of the year meant down grading for all of 2014 because that have severe winter
because of problems along with strange things that were going on with inventories. but to your question i think there are a number of issues at play. among them is the weakness of the american consumer. we've had car sales but those are have car sales that occurred because there were so few car sales in years past. if you're just buying a car right now that probably means to some degree you're going to pull back on buying others things. >> mike, the last time you were here you had just come off a run of pretty bad months. how are things recently. >> the summer, we bounced back. june was flat. july was up 12%, and august was up an astonishing 20%. >> michael: so what does that mean? you've been in the business for a long time. when people are coming through the front door or reaching you online and you suddenly see the traffic up, how do you read that? >> at this point i'm reluctant
to read too much into it other than because two months does not make a trend. nobody buys things because they have money. they buy things because they think they're going to have money. nice entries like this, if it continues i'll be thinking even though the economy has not reached everybody, people will feel like things are getting better, and that's important for retailers. >> are you slower to fill your shelves again after a 20% good month? are you taking a wait and see view on hiring more people, for instance? >> absolutely we're have little bit gun shy. there have been ups and downs. but for us hiring the inventory is a rubber band.
you can only contract so much and keep the doors open. while sales are coming back up we have slack in our system that needs to be taken up before we start adding more people. >> bill snyder, it's true, it hasn't been great but we're coming off one month of 200 plus and another month of 300 plus. >> incomes medians incomes are lower than before the recession. there are some people who made out very well but they tend to be the people at the top. the college graduates and people with technical skills. what most americans are asking right now is a simple question. where is the boom? where is the boom? the recession and by second term the economy was booming. clinton elected in the recession. the second election the economy was booming. people are waiting for the boom.
>> but there is at the same time some are feeling that things have changed fundamentally, there is not the ebb and flow but we're now in an era where good times may not be coming back. >> dare i use the word malaise? there is something to that. people were promised by obama that he could turn the economy around. they don't see it turning around. they're disappointed. it's not a boom, but it's not a bust either. it's in the middle. most likely the economy will be the determinant factor in this election. people are disappointed. why aren't they happier? what they say is greater inequality. as ali velshi indicated. they're seeing discrepancy between rich and poor. the occupy movement did not make much difference on economy but it has brought an impact on the
1%. >> people who aren't in the 1% went back to work in the last two years, but even a lot of them, those people don't feel that great. >> the 1% has become the 10%. that was borne out by figures released by the federal reserve that indicated in the period of 2010 to 2013 only the top 10% of americans really had any income gains at all. the others were marching in place or losing ground. and so maybe it went back to work, but you might be working part time wishing to have full-time work. we know from the official data that is 7 million americans. >> and mike, how does that effect someone who sales what's not food, clothing, shelter, not one of life's necessity. you sell goods that people like to have when they have a little free time and a little free money. >> it's not good.
uncertainty in general is a bad thing. certainly in retailing uncertainty is the last thing you need. if your car breaks down you need to get back and forth to your job and pick up kids at daycare you're going to buy a new car. radio controlled airplanes, and other things in that category are the first things to get cut. but they're also the first things to come back when people tart to feel good. if these gains continue in the third and fourth quarter then we might be on to something. >> can people shift their entertainment dollar? maybe you can't forward to rent an rv and drive the family across the country but you can afford to take them to a local park and use a radio-controlled plane that they buy from you? >> that's absolutely right, and in past recessions we've seen that where people weren't traveling as much. we had really good summers, $500 remote control truck is a lot
>> welcome back to "inside story" on al jazeera america. i'm ray suarez. late in the big expansion of the 1990's job markets finally tighten enough so that even marginally employed people came off the sidelines, could trade their labor for more money. started to see a rise in their standard of living. slow and steady has not been enough growth this time to sop up the slack demand. still with us, bill snyder, mike
bray, and mark hamron. bill snyder, the economy--we could go from door to door and show people the numbers, but that would not change the way they feel, and politics is a feel business. >> it's very subjective. one of the complaints you hear about the economy and one that is very new is the sense that globalization is a burgeoning threat to american workers. they're made to feel that they need to compete with low-paid foreign workers, and for them that's not fair. the economist will tell you if you can pay less, that is fair but for workers that is unfair that they're being forced to
compete in the global economy. >> there are a lot of people who have taken themselves out of the job market. they haven't retired. they don't show up in the numbers. >> i don't know if there is a direct correlation between globalization and the number of people who are working or want to working, the labor participation issue that you raise. i think it definitely is making the u.s. kind of a reset to a standard that is set by the rest of the world. in terms of labor force participation, a lot of dynamics there. people my age and older are feeling that their retirement accounts are not as whole as they had hoped even if have a retirement account. younger people are not as vibrant participation in that workforce as earlier. many of them going to school. not a bad thing. some of them doing that by force, in other words, they can't find a job. >> do we have a sense of how many people are working off the
books? a lot of people are going back to work, but they may not be showing up in the numbers. >> that is something that the government does not do a good job of capturing. i've done reporting on that talking about what we call the freelance economy. we know that, in fact, as a result of some of the budget c cut, they're not counting people as they have in the past. it's a dynamic global economy and in some cases people are frankly trying to get by any way they can, and in some cases that might mean cash under the table. i don't think it's a significant issue but keeping track of these dynamic changes is a challenge and the government is not funding itself enough to do th that. >> mike bray what flips the switch. if your business remains up and you can no longer get all the work done that you need to get done with the current staff, you're using overtime as a way of covering up some areas. what finally pushes you over the
threshold to add a human being to your payroll. >> it's just consistency in sales. two months up. three months down. that does not entice a business person to add to payroll. sustained, steady, whether it's growth or consistency in sales that's what gets your motor running when it comes time to hire somebody. >> you've moved your operation online. you've seen growth in that area. is that a different place from retail when it comes to staff? >> absolutely. it's a different place in a lot of ways. it's a different place in terms of how the business functions. one of the reasons you've seen retailers struggle. but also there are many fewer people. as we--when i open a retail store there is a certain mass of
people i need to keep that store hope to protect it from security standpoint, to service customers, expanding online you really--it's really about one high-paid guy managing a whole bunch of really, really low-paid people. >> bill snyder, it is not a stretch at all to suggest the unemployment rate on election day will be an enough that starts with a five. and yet we don't hear democrats talking too much about their stewardship of the economy. >> can you imagine democrats running for re-election saying you never had it so good in this economy? it would be cut off at a stroke. they know better than to do that. people don't feel this is a great economy. they're disappointed in president obama. they're not desperate. they feel the crisis may be over but the president's performance has been disappointing partly because they don't feel that he shows enough leadership and resolve, they're not longing for
the return of george w. bush. his resolve showed recklessness, but someone who is showing strong right now is hillary clinton. people associate the clinton record of her husband with good times. in every sense of the word. >> to be continued, thank you for joining me today. this brings me to the and of this edition of "inside story." thank you for being with us. we have a couple of more job reports before election day. watch this space. in washington, i'm ray suarez. [♪ music ] >> coming up at 6:00 p.m. on al jazeera america. president obama and nato allies have committed to an united approach to deal with the threats from the islamic state group. and they've agreed to cease-fire
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